BUSINESS IN BRIEF
Adelphia Deception Detailed
Friday, May 21, 2004; Page E02
Adelphia Communications regularly hid a list of fraudulent financial data from its auditors, said former vice president James R. Brown, the government's star witness in the fraud trial of founder John J. Rigas. Brown, who pleaded guilty to fraud and conspiracy charges, said that executives at the cable television operator feared telling the truth to its former auditors, Deloitte & Touche. "We regularly prepared a schedule we referred to as 'exposure items' that if Deloitte came across them, we wouldn't be able to defend," Brown, 42, told federal jurors in New York during his 12th day of testimony against John Rigas, 79, and his sons Michael, 50, and Timothy, 47.
SEC Looking at Pay Disclosures
The Securities and Exchange Commission may force companies to divulge more information about executive compensation, Alan L. Beller, director of the SEC's Division of Corporation Finance, said in a speech in Alexandria. Beller said changes in executive pay, including stock-based compensation, have outpaced SEC rules but he declined to specify how those rules might change. Investor groups have complained that companies hide excessive compensation within packages that are only vaguely described in SEC filings.
The Composite Index of Leading Economic Indicators, the Conference Board's closely watched indicator of future economic activity, edged up in April, providing more evidence of a sustained recovery. It rose 0.1 percent in April, after a revised gain of 0.8 percent the previous month. The increase was slightly lower than the 0.2 percent rise forecast by analysts.
Microsoft was ordered by a federal judge to search a company computer to help explain why James E. Allchin, who runs the company's flagship Windows business, told employees in 2000 not to save e-mails for more than 30 days "due to legal issues." U.S. District Judge J. Frederick Motz in Baltimore issued the order in an antitrust and patent suit by Burst.com, which has accused Microsoft of stealing its technology for broadcasting sound and video over the Internet at high speeds. Burst.com charges that Microsoft destroyed e-mail that may help prove its case. Motz said he didn't believe Microsoft's explanation that its information technology department inserted the words in the company policy statement to make it easier to persuade employees to delete e-mails after 30 days to save memory space.
The House approved an amendment to a defense spending bill that requires the Air Force to complete by March 1 negotiations to purchase 80 Boeing 767 planes for use as refueling tankers. The Air Force also plans to lease 20 planes from Boeing in the $23.5 billion deal, which is stalled amid a criminal probe into the deal and a series of Pentagon reviews. But a spokesman for a watchdog group that has criticized the tanker deal said the House action would accomplish little because the amendment is almost certain to be defeated in the Senate.
Yum Brands offered at its annual meeting to help a group of Florida farmworkers push for better wages and working conditions if it agreed to end its three-year boycott of the company's Taco Bell chain. The Coalition of Immokalee Workers has been trying to prod Yum into using its leverage with farm owners by paying a penny more per pound for tomatoes and other vegetables.
A former Dynegy executive surrendered at a low-security federal prison in Texas to begin serving a sentence of more than 24 years. Jamie Olis was convicted of conspiracy and five counts of securities, wire and mail fraud last year for helping push through a 2001 scheme to disguise a loan as cash flow.
McDonald's new chief executive, Charles H. Bell, assured shareholders at the company's annual meeting that his battle with colorectal cancer has not hurt operations and said that the revitalization plan introduced last year continues to boost patronage and profit. McDonald's is serving about 2 million more people daily at its nearly 30,000 restaurants worldwide and sales at outlets open at least a year have increased 9.4 percent in the first quarter, Bell said.
American Express was censured by NASD and fined $300,000 for poor recordkeeping in variable annuity transactions. NASD, formerly known as the National Association of Securities Dealers, said it discovered inadequacies as a result of an investigation into unauthorized withdrawals from a customer's variable annuity account.
Tellabs, a telecommunications equipment company, said it agreed to buy telecom supplier AFC for $1.9 billion in cash and stock because of a desire to acquire a broadband provider.
© 2004 The Washington Post Company
Japanese police searched offices of Mitsubishi Fuso Truck and Bus, inside the Mitsubishi Motors building in Tokyo, a police spokesman said, declining to give a reason. Wilfred Porth, right, president and chief operating officer of Mitsubishi Fuso, said the company plans to recall nearly 200,000 more trucks and buses, after an investigation revealed that faulty parts may have caused several accidents, one fatal. He apologized for the recall and said it showed how executives at Japan's third-biggest truck manufacturer encouraged coverups of potential safety violations in the past.
(Kimimasa Mayama -- Reuters)